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Author's profile photo Martin Schmidt

SAP S/4HANA Extension ledger – Use cases

In this blog post, I will give you an overview of extension ledger use cases in the latest release of SAP S/4HANA On-Premise and S/4HANA Cloud, private edition. These use cases will give you a clear idea about extension ledger usage. However, before we start, we will need to understand what is an extension ledger. You are probably well aware of standard ledger functionality in SAP ERP. Due to different regulations and requirements, the majority of companies today publish financial statements according to multiple accounting standards in parallel. Starting from SAP ERP with newGL you can use standard ledger functionality where a separate ledger is kept in the system for each accounting standard.  There are 2 types of ledgers – leading ledger which is integrated with all subsidiary ledgers and controlling. Then you have parallel ledgers which are called non-leading ledgers.  These parallel ledgers are always managed as complete ledgers.  This means that all postings relevant to the specific valuations are always posted fully. At the moment, parallel ledgers are supported fully in General Ledger and Fixed Asset Accounting, but the vision is that all finance applications based on the universal journal will be able to work with parallel ledgers. 

What is an extension ledger? 

In SAP S/4HANA, we have a new type of ledger – an extension ledger. The extension ledger, in contrast to the standard parallel ledger, is a delta ledger. It means that only differences between valuations are posted into the extension ledger.  As a delta posting is meaningful only in combination with the original posting, the extension ledger always must have standard ledger assigned as an underlying ledger.  The postings to the underlying ledger also apply to the extension ledgerAnytime you report on the extension ledger, data from the underlying ledger are always accessed and displayed together with delta posting. 

Based on what kind of journal entries you want to post to the extension ledger, you can define 3 extension ledger types: 

  • Standard Journal Entries– stores journal entries with real document numbers. These journal entries cannot be deleted and have to be reversed when required. Use cases  management adjustments, tax adjustmentsrealignments 
  • P – Line items with technical numbers /no deletion possible (former Prediction) – stores journal entries with technical numbers only, without document numbers. They cannot be deleted and have to be reversed when required. Use cases – predictions, commitments, statistical sales conditions.  
  • S – Line items with technical numbers/deletion possible (former Simulation) – stores journal entries with technical numbers only, without document numbers. They can be deleted. Use cases – simulation, posting 

You may also come across the so-called valuation extension ledger V -Journal Entries for valuation differences, which is not ready yet but was made visible in the configuration by mistake 

Advantages of an extension ledger 

  • Flexibility – This is probably the biggest advantage of an extension ledger when compared to standard ledgers. Setting up new extension ledgers is easy, it is not necessary to perform any kind of data migration, only the configuration is needed., This is enabled by the extension ledger concept, as it just inherits the historical data of the underlying ledger. You can activate or deactivate the extension ledger in a productive system anytime during the year without having to migrate data as it is the case with the standard ledger. 
  • Reuse of existing reports – All reports supporting standard ledgers also work with extension ledger. This is true for new FIORI analytical apps and classical SAP GUI reports as well. 
  • Reduced data footprint – as only delta values are kept in the extension ledger 

Replacement of standard ledger with extension ledger 

It is important to realize that the extension ledger is not a replacement for the standard parallel ledger. It still has many limitations in terms of functionalities. You can post to the extension ledger via  

  • manual postings (i.e. transactions FB50L, FB01L, KB1, KB41, or corresponding FIORI apps such as Post General Journal Entries)  
  • interfaces  
  • General ledger Allocations (FAGLGA15, FAGLGA11, FAGLGA31, FAGLGA35) work on top of the extension ledger 

However, in contrast to the standard ledger, the extension ledger is not integrated with subsidiary ledgers and many crucial finance processes such as asset processes and open items are not supported 

Extension ledger restrictions 

  • No postings to vendor or customer reconciliation accounts 
  • No postings to GL accounts with open item items management 
  • No integration with Asset Accounting 
  • Only very few automatic processes work with extension ledger (GL allocations) 

What are some existing extension ledger use cases 

Adjustments Ledger 

Besides preparing GAAP financial statements  many companies have fairly rich management reporting requirements. Most of the information needed comes from standard ledgers but usually, data must be regrouped, enhanced, or refined. In the past, in SAP ERP you could use a special Ledger, a second parallel Ledger, or just add cost objects to address this kind of requirement. However, none of these solutions was optimal and each came with its problems and limitations. Now, in S4HANA we have a better solution – the extension ledger.  

You can set up an extension ledger, for example, to record: 

  • Internal Management reporting adjustments 
  • Adjusting entries after books are closed.  
  • Topside adjustments  
  • Adjustments for tax purposes to reach a tax-adjusted profit or loss 

Predictive Accounting 

Predictive accounting is a functionality enabling bottom-up prediction of future financial results.   If you look into an ERP system, you can see there is already alot of information that can create predictions. There are documents such as sales orders or purchase orders which are not accounting relevant yet, but we can assume that at some point in time, they will result in postings. In addition, these documents already contain the amount and expected date when they will be transformed into accounting-relevant documents. For example, if you look at the order-to-cash process, we have a sales quotation, sales order, goods issueinvoice, and payment.  However, only goods issues, Invoices, and Payments are relevant for Accounting. The other documents are in the system as well, but they do not impact accounting.  The first scenario of Predictive Accounting available in SAP S/4HANA is for Incoming Sales Orders.  The idea here is pretty straightforward: when a sales order is created, the system will simulate the followon documents, goods issues, and billing documents, and create predictive journal entries in a P-type extension ledger. The best part is that the corresponding documents are displayed in the system as if they were real data. All subsequent financial processes such as document splitting, derivations, and splitting of costs of goods sold are also triggered. 

For further details, please refer to SAP help 

Statistical Sales Conditions 

Statistical Sales conditions, for example, warranties can be posted to an extension ledger during sales order billing This can enable enhanced SG&A reporting in a P&L Statement by allowing the inclusion of projected sales warranty costs.  

For further details, please refer to SAP help  


Purchase Commitments  

Commitments Management functionality in SAP S/4HANA updates purchasing commitments in the extension ledger.  A Purchasing commitment represents an obligation to pay a vendor for the future delivery of goods or services. Commitments are triggered when a purchase requisition or purchase order is created in the system. At this point, there are no actual payments recorded against GL accounts, but a reservation (commitment) should be made against the budget.  The activation of commitments updates in Universal Journal makes sense especially in relation to the new Budget availability control available since the 1909 release. Until release 1809 commitments were stored in the dedicated line items table COOI, and totals were stored in the table COSP. Since S4HANA 1809, the commitments now update Universal Journal (table ACDOCA). In order to distinguish them from actuals, they are stored in a separate extension ledger which must be defined as a prediction ledger. For compatibility reasons, commitments are continued to be updated in the old commitments tables as well. 

For further details, please refer to SAP Note 2778793 – Constraints with New Commitments Management Solution . 


An example of a simulation is a closing activity with Foreign Currency Valuations. Imagine that you would like to see an impact of foreign currency revaluation on your financial statement before actually running it.  Since SAP S/4HANA 1610you can run the Foreign Currency valuation in simulation mode. The simulation run generates valuation posting documents that are posted into an S-type extension ledger. Reporting on the simulation ledger combines simulation data with actual data of the underlying ledger. You can see the simulated data on all reports for which you can specify a ledger. The simulated data are deleted automatically once you run the foreign currency valuation in productive mode. This way you can run financial statements and see the impact of currency changes any time before actually posting them. 


Another example is the simulation of organizational changes. The current scope of organization changes supports profit center reorganization for S/4HANA Cloud customers (available since release 2008). Here you can use an extension ledger for posting the simulated transfer journal entries.


These are some of the use cases of extension ledgers that have already been developed and successfully implemented by customers. And there is more coming in future releases. Some of the upcoming enhancements are on the roadmap already, for example, enabling predictive accounting for purchase orders. Some of the future concepts include the possibilities of using an extension ledger for the simulation of closing activities or the simulation of reorganizations. I would like to hear your thoughts in the comments below. What do you think about the extension ledger use cases? Should we add more?  

Brought to you by the SAP S/4HANA RIG

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      Author's profile photo Sai Krishna Vallurupalli
      Sai Krishna Vallurupalli

      Hi Martin,

      You have not mentioned about V - Valuation ledger (Extension ledger)?

      If possible could you provide some light on Extension ledger V?



      Sai Krishna

      Author's profile photo Martin Schmidt
      Martin Schmidt
      Blog Post Author


      At the moment, there are no further details. I will update the blog once information about Valuation ledger use case is made available.

      Kind regards,



      Author's profile photo Terry Hastings
      Terry Hastings

      Hi Martin. Can you post in Extension ledger only to an auto posting controlled GL account? like revenue (Auto post only set) or you would need an open adjustment revenue account?

      Author's profile photo Phanipoorna Avula
      Phanipoorna Avula

      Thanks for nice info. There is no simulation ledger available in 1909 release. Is it discontinued? Any idea.

      Author's profile photo Martin Schmidt
      Martin Schmidt
      Blog Post Author

      Hi Avula,

      Simulation ledger is still there. It is extension ledger type S – Line items with technical numbers/deletion possible 

      Kind regards,



      Author's profile photo Mahesh Chilukuri
      Mahesh Chilukuri

      Thanks for nice info.

      Author's profile photo Patricia Fino
      Patricia Fino

      Thanks for nice info.

      I would just like to check if the Extension ledger restrictions are still existing.

      Kind Regards,


      Author's profile photo Martin Schmidt
      Martin Schmidt
      Blog Post Author

      Hi Patricia,


      Yes, they still exist.


      Kind regards,



      Author's profile photo Laxman Chaudhari
      Laxman Chaudhari

      Hi Martin,

      I was searching for the extension ledger uses.

      Thanks for sharing this. Looks promising in new developments.

      Can we use the statistical condition types with same account key and same GL account in the setup to have separate line items in ACDOCA for the condition types?

      For example: I have 4 condition types ZSC1, ZSC2, ZSC3 and ZSC4. I have assigned same account key ZS1 with same account number 10000000 in VKOA.

      Is it possible that extension ledger also give different line items as happens leading ledger?



      Author's profile photo Soufiane Machrouhi
      Soufiane Machrouhi

      thanks Martin, it is indeed a very good post and it is more and more interesting our clients.

      below few feedback after implementing extension ledger for FX simulations:

      • the functionality is very welcomed by the users
      • the simulation runs are not going through validation rules as it is done by the update run
      • no historical trace is kept from old simulations to help users to compare FX impact evolution

      Question: what is planned in terms of features for the simulations? it will only kept for FX revaluation?

      thanks or your help,


      Author's profile photo Martin Schmidt
      Martin Schmidt
      Blog Post Author

      Hi Soufiane,


      Thank you for your feedback.

      What is planned is, for example, simulation of organizational changes. Please see the road map here.

      Kind regards,


      Author's profile photo Soufiane Machrouhi
      Soufiane Machrouhi

      thank you Martin. Can you some how share this feedback with the product owner?

      • the simulation runs are not going through validation rules as it is done by the update run
      • no historical trace is kept from old simulations to help users to compare FX impact evolution
      Author's profile photo Joachim Nerreter
      Joachim Nerreter

      Thank you, Martin, for this excellent information.

      One question regarding the use cases for extension ledgers: should predictive accounting, statistical conditions and purchase commitments use the same ledger or a separate one? What is the recommendation?
      To my knowledge, no predictive journal entries are created for statistical conditions in predictive accounting. Hence there is no need to have predictive accounting and statistical conditions in one ledger for analysis purposes.

      Does predictive accounting cover scheduling agreements (VA33) as well?


      Thanks, Joachim


      Author's profile photo Martin Schmidt
      Martin Schmidt
      Blog Post Author

      Hi Joachim,

      a separate ledger for predictions+commitments and a separate ledger for statistical SD conditions.

      Please refer to SAP Note 2947863 - Predictive Accounting: Restriction Note (SAP S/4HANA 2020) for sales processes supported in predictive accounting.

      Kind regards,


      Author's profile photo Peter Butler
      Peter Butler

      Hi Martin

      Firstly thank you for the content you have shared.

      I am think of an adjustment scenario, however it would be great to automate the adjustment to enable real-time reports.

      For example, a charge is posted to the standard ledger against a Business Area that has defaulted from a Functional Location to a PM Order. The business area represents a type of service for example regulated vs unregulated services provided by the organization. In this instance a small amount of physical assets are 'mixed' in that they can be used for both services.

      We would like to automatically create an adjustment entry in the extension ledger that allocates costs to regulated / unregulated based upon an agreed % for the asset concerned.

      How might we best go about this?


      Author's profile photo Mandeep Singh Grover
      Mandeep Singh Grover

      Good and concise info.. thanks for sharing..!!

      Author's profile photo Paulo Vitoriano
      Paulo Vitoriano

      This commitments ledger is a WIP product. Considering the list of "constrains" (declared as features) it is too far from substituting the COOI table.

      Author's profile photo Venkata Ratnam Mannuru
      Venkata Ratnam Mannuru

      Hi Martin,

      Thanks for sharing detailed information on extension Ledger.



      Author's profile photo Purushottam Arote
      Purushottam Arote

      Thanks for sharing Martin !

      Author's profile photo Edwin Weijers
      Edwin Weijers

      Hi Martin,

      For a customer we succeeded to create an extension ledger with an existing extension ledger as the nase ledger. The Pfkey4 dropdown shows only standard ledgeers as possible base ledgerm but we ignred this and put in the extension ledger as base ledger for the 2nd extension ledger.

      This enables the opportunity to stack extension ledgers.

      the customer can report

      1. base ledger
      2. base ledger + extension ledger 1
      3. base ledger + extension ledger 1 +extension ledger 2

      Can we just do this? It seems to work, but are there any restrictions?







      Author's profile photo Martin Schmidt
      Martin Schmidt
      Blog Post Author

      Hi Edwin,

      Yes, it is possible. Please see the sap help Extension ledger types for restrictions.

      Kind regards,



      Author's profile photo KAPIL MEHTA

      Dear Martin

      Thanks for excellent blog.



      Author's profile photo Jack He
      Jack He

      Thanks Martin for the helpful blog.

      One question about "S - Line items with technical numbers/deletion possible" of extension ledger type, after doc posted with FB50L I can still see the doc number in the table, and how it will be deleted? with which Tcode?



      Author's profile photo Martin Schmidt
      Martin Schmidt
      Blog Post Author

      Hi Jack,


      At the moment, there is no standard transaction or app for the deletion of the journal entry. It is handled by programs that use this type of ledger for simulation postings. I would recommend disabling manual postings to this type of ledger in the ledger settings.


      Kind regards,



      Author's profile photo Sandeep Mehta
      Sandeep Mehta

      Hi Martin


      Is it possible to use extension ledger when an organization is using accounts approach in SAP HANA rather than ledger approach?



      Author's profile photo Martin Schmidt
      Martin Schmidt
      Blog Post Author

      Hi Sandeep,


      Yes, it is possible.


      Kind regards,



      Author's profile photo George Radicopoulos
      George Radicopoulos

      Dear Martin,


      Can you tell me , or provide me bibliography, why extension Ledger do not update BSEG and cannot display journal entries per extension ledger in fbl3n or fbl3h?


      Only fagll03 or fagll03h depict the account entries per extension ledger

      Thanks in advance

      George Radicopoulos

      Author's profile photo KARTHIKEYAN GANESAN

      Hi Martin,

      We would like to understand whether extension ledger supports foreign currency valuation without defining it as simulation ledger. As simulation ledger data are transient and will be deleted as soon as production run is done, we want to understand whether fcv can be posted to  extension ledger which is of type standard journal entries.

      In that case whether system will update the fcv ONLY in extension ledger,.




      Author's profile photo Bo Yang
      Bo Yang

      Hi Martin,

      Excellent work, thanks.

      Here I've got a question about extension ledger and special ledger.

      Does a posting to extension ledger transfer data to special ledeger, for example, usimg FB50L?





      Author's profile photo shailesh yadav
      shailesh yadav

      Hi Martin,

      Is there any way to reverse the P - Line items if it is not reversed at time of GR?

      we have some purchase requisitions posted in Extension ledger which needs to be reverse.

      shall we need to execute any program to reverse the P - Items manually?



      Author's profile photo shailesh yadav
      shailesh yadav

      Hi Martin,

      How we can reverse the P - items manually if it is not reversed at the time of GR?



      Author's profile photo surendrakumar venkata pavana sivanaga kotha
      surendrakumar venkata pavana sivanaga kotha

      Thanks for the Knowledge sharing, very crisp and clear. All the best!

      Author's profile photo Mehmet Koc
      Mehmet Koc

      Thanks a lot Martin for this nice and concise blog.  It helps to understand better the pro & cons of the extension ledger.